Takeda Pharmaceutical Co., whose best-selling diabetes drug Actos lost patent protection in August, rose to the highest level in more than four years after winning U.S. regulatory approval for a new treatment.

The Osaka, Japan-based company advanced 1.4 percent to 4,615 yen in Tokyo trading, the highest since December 2008. Japan’s Nikkei 225 Stock Average fell 0.9 percent.

Takeda and Furiex Pharmaceuticals Inc., its partner on the drug, received clearance from the Food and Drug Administration for alogliptin and two combinations of the treatment to use with diet and exercise for patients with Type 2 diabetes. “Alogliptin helps stimulate the release of insulin after a meal, which leads to better blood sugar control,” the FDA said Jan. 25.

“Investors hadn’t priced expectations for the new treatment in earnings and thought the stock wouldn’t fall if Takeda didn’t win approval,” said Ryoichi Urushihara, a Tokyo-based analyst at Nomura Holdings Inc. “Then, approval came in and boosted earnings expectations.”

The approval gives Takeda a new revenue source as cheaper generics erode earnings from Actos, its largest sales contributor and once the world’s biggest diabetes drug. Takeda, whose application for alogliptin was twice rejected by the FDA, has projected net income would fall to a 13-year low of 120 billion yen ($1.3 billion) in the 12 months through March 2015. The company said it plans to sell the medicines beginning in mid-2013.

Today’s gain boosted Takeda’s climb this month to 20 percent, compared with a 4.1 percent advance for the Nikkei.

Sales Peak

Actos sales peaked in the year ended March 2011 at $4.5 billion for Takeda and accounted for 27 percent of the company’s revenue at the time.

Alogliptin is in the same class of drugs as Merck & Co.’s Januvia, which generated $3.3 billion in 2011, and Bristol-Myers Squibb Co.’s Onglyza, which sold $473 million that year, according to data compiled by Bloomberg.

The first rejection of alogliptin came in June 2009, when the FDA said clinical data was insufficient based on new guidelines on diabetes treatments and cardiovascular risks released in December 2008. Takeda conducted additional studies for its resubmission. In April last year, the FDA asked for more information on the use of the medicine in other countries.

In the U.S., 25.8 million children and adults, or 8.3 percent of the population, have diabetes, including 7 million people who are undiagnosed, according to figures from the American Diabetes Association’s website.

Diabetes is caused by the body’s inability to use or produce the hormone insulin. It can lead to heart disease, kidney failure, blindness or amputations. Most diabetics have the Type 2 form linked to being overweight or inactive.

Alogliptin is approved in Japan and sold under the brand name of Nesina. The tablets will go by the same name in the U.S. The other products will be called Oseni and Kazano, Takeda said in the statement.

Furiex will receive a $25 million payment as a result of the approval as well as royalties based on U.S. sales, the Morrisville, North Carolina-based company said in a statement.